professional dairy managers of pa annual members meeting

November Issues Forum

Professional Dairy Managers of PA Annual

Members Meeting

November Issues Forum

Kurtland Farms“Our Top 10 Milestones”Tim Kurtz

Kurtland Farms

November Issues Forum

2006 – Profit Team Start

CDE Initiative 125 Cows Prompted by Frustration Need for Outside Resources

and Guidance Quality of Life Important!

November Issues Forum

2007 – Developed 3-Year Strategy

Dairy Alliance Initiative Five-week Hands-on Workshop SWOT Analysis Need for Business Plan Benchmarking Cost of Production

November Issues Forum

Needed Answers

What is the long-termviability of dairying in this community?

What is the long-term profitability of current facilities?

What are the bottlenecks & limiting factors? Is there enough land? What are other options for the farm?

November Issues Forum

Immediate Action Steps

Short Term: Ventilation, Sexed Semen, 3X milking,

Written SOPs, Amino Acid ration balancing, Shot program

Long Term: Becoming involved in dairy

industry organizations Vital to gain additional

perspective

November Issues Forum

2009 – Began Expansion Exploration

Involved Lending Institution,Engineering Consultant, & Construction Company

Environmental grant availability??? Building site was obvious Extremely tight budget Grants seemed only hope Had to be permitted but not guaranteed

November Issues Forum

2010 – Denied Waiver

Required Land Development Plan Added Considerable Cost Lesson learned: Need highest

level of experience on team Jeff Ainslie consulted Started 2-year process of designing economically

viable facility Numerous trade shows, workshops, phone calls,

emails and consultations

November Issues Forum

2011 – Transformation Team Start

Focused on challenges Assisted with engineering &

permitting costs Penn State Extension Feasibility &

Cash Flow Analysis Brought clarity and credibility Brought new level of energy

November Issues Forum

2011 – Operation of Satellite

Adjoining Dairy Opportunity for additional cows and feed availability Employees stayed with operation Allowed for more specialized employee

responsibilities

Allowed Us to Keep Replacements & Streamline Labor Force

Within 3 Months of 3X Milking, Added 15 # Per Cow Per Day

2011: Began Relationship With Different Construction Company

May 2012: Manure Storage

& Processing Grant Approved!

November Issues Forum

June 2012 – Began Relationship With New Bank

Financing MostChallenging Part of Project

Always Kept Open Lines of Communication Explored All Options

September 2012: Began

Construction

Best possible environment

November Issues Forum

Is It Worth the Investment?

November Issues Forum

Item Cost

Expansion/Construction Cost:

-- Soft Costs (Engineering, Permitting, Environmental)

$50,000

-- Barn & Milking Equipment Costs $2,070,000

-- Miscellaneous Costs $40,000

Subtotal $2,160,000

Environmental/Manure Grants $866,653

Grand Total $3,026,653

220 Cow Robotic Free Stall Barn, Manure Storage & Processing -- Start

Up: 3/18/13 Goal: 7.8 million lbs. of milk per yr

Does Not Include

Cattle Or Start-Up

Costs

November Issues Forum

Robotic Milking: A Natural Fit

Voluntary milking gives cow more flexibility and lowers stress

Labor skills even more important

Enhances positive consumer attitudes

November Issues Forum

Composted Manure Solids

• Manure recycled via press separator and compost drum

• Clean, comfortable stalls are deep bedded

• Environmentally responsible• Additional revenue stream

November Issues Forum

Precision Advantages

• Accuracy of information• Detection of abnormalities• Analyzable data• Production Efficiencies

November Issues Forum

Too Much Information?

• Need to decide what information is needed, when it is needed and where to find it• Monitor on a broader level • Investigate attentions in

more detail

Cows have averaged 85 pounds per day for past six months

in robotic barn.

November Issues Forum

Healthy Cows=ProfitTeamwork=Success

• Many skill sets needed.

• Appeals to next generation

• Mission statement values: Profitability, Quality of life, Stewardship, Having Fun, Honor God

November Issues Forum

Future?

• 100% robotic • Transition to next

generation of ownership

PATIENCE, PERSERVERENCE, PERSISTENCE!

November Issues Forum

Jeff AinslieTransformation Team Member

Site Planning / Permitting / Engineering

November Issues Forum

Kurtland Farms - Take Homes

Lenders talk about the 3 (or now more) C’s of credit

In the quest to construct a new dairy facility, we should be talking about the Four P’s:

1)PLANNING2)PATIENCE3)PERSEVERANCE4)PERMITTING

November Issues Forum

PLANNING

No offense to the builders -- but the details of the barn can wait until a landowner knows what he or she can do where on their property.

November Issues Forum

PATIENCE 7/15/10 Timeline Discussed @ Kurtland

July August September October November December January February March April May Oct

NMP DONE

EQIP application DONE - BE SURE EXTENDED

CDE planning grant DONE

CDE Digester Grant App DONE - OTHERS?

CDE Digester Grant Dec ***

Construction Budget Update?

Feasibility update ************************

Stormwater Plan (Twp)

Site Specific Storage Design

E+S Plans

Water Quality Part II

Credit Ownership Determination

PENNVEST Application *****

PENNVEST Determination******

OR

Wetlands +/or Nutrient Credit Proposal to DEP *****

DEP Determination*****

Construction (?)

Milking Date (GOAL) XX

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FY 2010 FY 2011KURTLAND FARM - ROBOTIC DAIRY COMPLEX

November Issues Forum

PERSEVERANCE

PENNVEST: 4th try was a charm! Caernarvon Sewer Authority /

Lancaster CD / others…. Berks Conservations District came

through

PERMITTING It is involved…and likely to get more so… It is complicated…and likely to get more

so… It is different for every project at every

location... It is costly in more ways than one….

November Issues Forum

Kurtland Farms - Take Homes

PLANNING Headlock dimensions can wait – confirm what

you can do on your property, and what regulations will apply to you

PATIENCE “My excavator is ready….we’re starting in a

month” – unfortunately, you are probably not… PERSEVERANCE

Stick with it and work with people that will help you get there

PERMITTING It’s a reality – but take the time early on to

learn what rules and regulations actually impact you and your project

November Issues Forum

Fulton Bank PerspectiveFrom Lamar King

November Issues Forum

Agricultural Lending in 2013

Communicate with Your Lender Prepare/Budget/Understand Your

Financials 5 Cs of Credit

Capacity (Cash Flow) Capital Character Conditions Collateral